S&P assigns MMK “BBB-“ rating Outlook Stable

Steel News - Published on Tue, 11 Dec 2018

Magnitogorsk Iron & Steel Works announced that on December 10th, 2018 rating agency S&P Global Ratings assigned the Company 'BBB-/A-3' long- and short-term issuer credit ratings with Stable Outlook. In a press release S&P notes that its assessment of PJSC Magnitogorsk Iron and Steel Works' (MMK's) creditworthiness incorporates MMK’s low-cost production profile, strong operating efficiency, significant share of high value-added products in sales, minimal leverage, and strong liquidity. According to S&P only high country risk in Russia and the inherent cyclicality and capital intensity of the steel industry are the main constraining factors for the rating.

The stable outlook reflects S&P’s view that MMK will have strong positive free operating cash flow generation of about $1 billion in each of the next two years, underpinning strong credit metrics of debt to EBITDA below 1.5x and funds from operations to debt over 60%.